Singapore raises its GDP growth forecast to up to 7%

Singapore yesterday raised its economic growth forecast for this year after a strong first quarter led by a surge in manufacturing.

The Trade and Industry Ministry said it expected GDP to expand by between 5 percent and 7 percent this year, 1 percentage point more than the government’s previous forecast.

The economy grew 8.3 percent in the January-to-March period from a year earlier and jumped a seasonally adjusted annualized 22.5 percent last quarter, the ministry said in a statement.

“Overall, first-quarter GDP growth has been broad-based and robust,” DBS bank said in a report. “Strong regional demand juxtaposed with a steady recovery in the US should deliver enough growth gas in the second half of the year to deliver that 7 percent full year growth.”

The ministry said last month in preliminary results that the economy in the first quarter had grown 8.5 percent from a year earlier and 24 percent from the previous quarter.

Manufacturing rose 13 percent from a year ago and 75 percent from the previous quarter, led by pharmaceutical production, the ministry said. Services increased 7.3 percent and construction was up 2.4 percent from a year ago.

The ministry said downside risks include sovereign debt sustainability in Europe, higher oil prices and a prolonged disruption of industrial activities in Japan. However, global economic growth, especially in Asia, will likely continue to support Singapore’s expansion, it said.